As technology continues to evolve rapidly, many businesses have been forced to constantly catch up to customer needs.
In the lottery industry, many national retail chains are trying to find ways to keep pace.
Whether it be digital advancements, greater access to products, or dipping a toe into online sales, all options are on the table.
However, with lottery being a form of gambling, regulations can make innovations tougher to unearth.
What options do national chains like Walmart, Kroger, and others have? It appears more than what would have been available a year ago.
Couriers are becoming more prominent in the industry and more widely accepted for online sales of lottery draw games.
Industry vendors are creating new products to make life easier for retailers regarding tracking and marketing.
Are these chains on the verge of becoming more impactful players?
Industry vendors pushing more digital innovation
Lottery industry leaders are definitely looking to help create a new era in sales for retail suppliers.
Scientific Games has created its SCiQ ecosystem, one of the biggest digital advancements of late.
These dispensing machines not only provide retail lottery sales, but also keep track of trends and data for retailers.
That leads to fewer man-hours for retailers to track sales, but it also provides insight as to which products each retailer should consider adding for its customers.
SG has recently debuted PlayCentral, Powered by SCiQ, which are self-service machines that allow customers to purchase tickets on their own.
The self-service kiosks are a start, but just show the potential lottery sales still have at these chains.
Nick Murtagh, Lottery Analyst for Sheetz, addressed the potential during the Public Gaming Research Institute Conference in Ft. Lauderdale in April. Sheetz is a chain of convenience stores, gas stations, and restaurants that has over 700 locations in six states.
“We operate (lottery) almost entirely out of out of vending machines. We all know what the size of those machines are and what that square footage is compared to the remaining portion of the store. It’s not a lot. As of fiscal (year) 2023, for Sheetz, lottery as far as revenue per square foot was number three out of all of our categories. That was behind only our made-to-order food and cigarettes. So, the amount of space that we operate in is very small, but the impact that we have from that space is extraordinary. I would love to imagine where that could go with more of these capabilities.”
Expanding on registers, customer access to lottery purchases
Walmart is one of the national chains that has expressed a desire to increase its lottery business.
It has partnered with IGT, one of the leading lottery innovators in the US, to customize its current vending machines.
However, the chain would like to see more, which could include opening the door to each register having the ability to sell lottery tickets.
Jarrod Cummins, Director of Commercial Business Lines and Digital Platforms for Kroger, noted during the Public Gaming Research Institute Conference that having a single kiosk to sell lottery makes it difficult to market, especially when that product can lead to millions in sales:
“We want to sell things. One of the things I found about this industry is, we’re multiple billion-dollar top-line volume. I’m amazed that we don’t have another product in our store that sells multiple billions of dollars that goes through a kiosk. And, it’s a kiosk that I can’t market, a kiosk that I don’t have data that I can market. Well, we can market it, but not to the level that we would market other products. It’s product that we don’t really promote. I think that’s astonishing.”
Chains willing to take chances on new lottery ideas
Promoting is one aspect that chains are eager to dive into. But, that requires collaboration with providers like IGT and Scientific Games.
Nobody has come up with that perfect equation yet for the larger chains, but Cummins says Kroger is ready to test new theories as long as they don’t cut into the franchise’s profitability:
“I really believe the industry is starting to become, you know, is on that path towards innovation and unlocking some significant value. I think the technology providers just have to have that mindset that sometimes it’s OK to fail. But that’s how you’re going to unlock something that really makes a meaningful difference.”
Whatever gets unlocked, it will have to be efficient.
These chains are trying to become more and more of the “one-stop-shop,” offering everything a customer could possibly need in one trip.
On top of that, they need to be organized when it comes to time, according to Cummins:
“Speed is important. That’s not a speed of like message, but it’s speed of the customer in terms of getting them in. It’s easily letting customers come in, navigate our stores, find the products they want, and then leave quickly. Customers lives are busy.”
Online sales through retail chains in the future?
In some cases, customers are no longer even stepping into stores for what they need. The “grab-and-go” option has become more convenient for people to save time.
Online orders are placed in advance and picked up during a set period.
When online orders are placed, one option that isn’t available is lottery tickets.
States with online lotteries have tickets purchased through their respective state lottery websites and mobile lottery apps.
Could that change in the future?
It’s not inconceivable that state lotteries would open the door to online sales through various retailers. It would benefit both parties in terms of increased sales and commission.
Lottery couriers are clearly making headway on a national level in recent months.
Jackpot.com was named the official lottery courier of the Associated Press. The AP will be able to offer lottery sales through Jackpot.com in states where the courier has clearance to operate.
Global Gaming Data is doing something similar with Jackpot.com in a new lottery widget it utilizes.
Google is beginning to allow courier ads on its platform.
These national chains could be looking for a way to tap into these partnerships for themselves in states where couriers are permitted.
With couriers still a hot-button issue in some states, the Multi-State Lottery Association could be enticed to work on partnerships with these national chains to provide regulated and secured online sales.
As powerful national chains get more involved in the discussion for lottery sales, nothing can be considered off the table.
Photo by Michael Conroy / AP
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